UK Inflation: what is the current rate?

UK inflation has fallen to 3.2%

UK inflation is down to the lowest rate in two and a half years.

Here, we explain everything you need to know about the latest inflation stats and which savings accounts offer inflation-beating rates. 

What is the current rate of inflation in the UK?

The current CPI rate of inflation in the UK is 3.2% for March 2024, according to the latest figures from the Office for National Statistics (ONS).

This was a slightly higher than the most recent predictions, which suggested a drop from 3.4% to 3.1%.

The current rate of core inflation (which removes more volatile products like food and fuel) in the UK is 4.2%, down from 4.5% last month. Meanwhile, RPI in the UK is 4.3%, down from 4.5% in February.

Historic inflation rates

The graph below shows how CPI inflation has changed in the UK.


What is inflation?

The main thing to remember is even if the rate of inflation is falling, prices are still going up. They’re just increasing by a slower rate.

Check out our What are inflation and deflation? article to learn more about what price changes count towards inflation, as well as explanations of the different measures including CPI and RPI.

When is the next inflation announcement?

The next inflation announcement will be on 22 May 2024. 

The ONS publishes inflation figures each month and has confirmed the following dates for upcoming announcements : 

  • 19 June 2024
  • 17 July 2024
  • 14 August 2024
  • 18 September 2024
  • 16 October 2024
  • 20 November 2024
  • 18 December 2024

What’s changed this month?

The main drivers of inflation this month were a higher increase in the cost of motor fuels and communication services, though that was offset by some lower increases to some foods, furniture and clothing. Combined the average rate was lower.

You can see how prices have changed for individual items in this ONS calculator, while this chart shows the difference in annual CPI rates for February and March.

Feb 2024Mar 2024
CPI All items3.43.2
Food and non-alcoholic beverages5.04.0
Alcohol and tobacco11.912.1
Clothing and footwear5.04.0
Housing and household services-1.7-1.6
Furniture and household goods0.0-0.9
Recreation and culture5.45.3
Restaurants and hotels6.05.8
Miscellaneous goods and services3.63.4
All goods1.10.8
All services6.16.0
CPI exc food, energy, alcohol and tobacco (core CPI)4.54.2
Source: Consumer price inflation from the Office for National Statistics

Will inflation go up or down?

Though it’s well down from the peak of 11.1% in October 2022, the latest rate is still higher than the Bank of England target of 2%.

Latest predictions are the rate could possibly drop below 2% for April’s figure, largely due to changes to the energy price cap. However the Bank have said even if this happens they expect it to rise slightly towards the end of the year and be a while before it levels off at the target rate.

What does it mean for the base rate of interest?

Expectations are that we will see cuts to the base rate, though if inflation doesn’t fall as fast as predicted it could mean this doesn’t happen as early as once thought, with markets pricing in a November cut. Only recently they were talking about June or August. As a result we may perhaps see only one or two cuts this year, down from a possible three or four.

We won’t know for sure for a while as it’s still likely we won’t see any change at the next meeting on 9 May 2024. We’ll share what happens in our Base Rate update article.

Do any savings accounts beat inflation?

Despite falling savings rates, we’re still at a place where there are lots of options that beat inflation!

The top-paying savings account is the First Direct Regular Saver which offers 7% and you’ll need to have a bank account with them to access this rate. 

It’s worth noting that this is a “regular savings account”. This means that you’ll have to meet certain requirements to keep the account open and get the full amount of interest. 

For example, depositing up to a certain amount each month or limits on how much you can withdraw. (Some don’t permit withdrawals at all.) 

You can also earn the same 7% with the Santander Edge Saver, if you hold a Santander Edge account. But you’ll have to pay a monthly fee for the current account, so keep that in mind when comparing savings rates.

However if you’re looking for accounts without these balance restriction, there are now dozens of easy access and fixed rate savings accounts above the inflation rate.

The best easy access is at 5.2%. These allow more flexibility and you can deposit and withdraw your money more freely. And there are fixes going as high as 5.17%, though you’re locking your money away.

2 thoughts on “UK Inflation: what is the current rate?

  1. Hi Andy, great summary, very professional. I’m still learning about all of these subjects, so thanks for that!

    Do you know what to expect regarding the interest rate of the savings accounts? Are the banks planning to reduce the interest rate soon based on the reduction in the UK inflation?

  2. Government controlled ONS will produce low incorrect data for September in order to determine next years pension & benefit increases then “amend” the data by December so the government can claim that it is too late to correct next years increases.


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